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The first edition of “Outpost Rome”, the Italian summit on innovation in defence and dual-use technologies, was held at the Ara Pacis in Rome.
The event was attended by the Defence Staff, the Ministry of Foreign Affairs and International Cooperation (MAECI), the Italian Space Agency, ESA, NATO DIANA, CDP Venture Capital, the European Investment Fund and Lazio Innova, alongside the sector’s leading industrial groups, start-ups and domestic and international venture capital funds.
Outpost Rome was promoted by NATAM Management Company, the collective manager of the NVM Venture Lazio sub-fund of the NVM Ventures fund (which has raised €23.6 million to date), and was organised by Ulixes Capital Partners (UCP), with funding from the Lazio Region’s cohesion policy funds and under the patronage of the Ministry of Defence.
The event focused on defence technology issues linked to two key concepts: the European dual-use regime and the Italian ‘golden power’.
What is meant by ‘dual-use’?
The term ‘dual-use’ refers to goods, technologies and know-how that serve both civilian and military purposes. The phenomenon is as old as technology itself, dating back to Haber’s synthesis of ammonia in the early 20th century, which produced both fertilisers and explosives. The term, however, originated during the Cold War as a customs category in the CoCom lists, which set out what could not be sold to the Soviet bloc. It was introduced in Europe in the 1990s with the same function as a barrier: a common export licensing regime, now governed by Regulation (EU) 2021/821.
The turnaround begins when a definition originally intended to prohibit something is used to provide funding. As we wrote in Startupbusiness in March 2025, in the wake of ReArm Europe, the European Investment Bank (EIB) – which until then had been unable to support the defence sector – had found in the term ‘dual-use’ the key to opening up credit lines for SMEs and start-ups. Meanwhile, climate start-ups were rewriting their mission statements with a focus on security. That loophole then became the norm: the Commission proposed a successor to Horizon Europe, ‘dual use by default’, and in June 2026 the Member States made ‘dual use by design’ a horizontal principle of the programme, bringing to an end forty years of exclusively civilian European research.
The European defence market: how much is it worth?
The most telling figure comes from *The State of Defence Tech 2026*, the report by Dealroom and Resilience Media published on 5 October 2026. European defence start-ups raised $7.4 billion in venture capital in the first nine months of 2026: almost triple the $2.6 billion raised in the whole of 2025. And the year-end projection stands at $10.5 billion.
The most striking figure concerns the origin of investors: US investors now account for 47 per cent of funding for European defence tech, compared with 17 per cent in 2020. Among the most active are Founders Fund (the fund run by Peter Thiel, co-founder of Palantir), Accel, General Catalyst, Lightspeed and Y Combinator. In short, the European defence sector is largely being financed by US dollars.
The Italian problem
This is not just about venture capital, but also about private equity. As Pierluigi Paracchi (Praexidia Foundation) explains, “two out of every three companies in which private equity has held a stake over the last 25 years have been bought by non-Italians, so we are losing a vital part of our industrial heritage. Until recently, ESG was effective because it ensured that many defence companies could avoid being bought by these funds; now things have changed. Today we are talking about 800 companies that will be sold, and as a result we will lose 500 of them because they will be bought by non-Italian firms”.
The‘golden power’could put the brakes on this domino effect, but, as Giulio Napolitano of Chiomenti says, “it is clear that Italy and Europe need investment and transactions, and these must be scrutinised by the supervisory authorities, the Ministry of Defence and the Prime Minister’s Office. The key point is to strike the right balance, because these rules must be applied on a case-by-case basis and there is obviously an element of political and administrative discretion involved in decisions regarding risk assessment”.
On the one hand, therefore, foreign investors in European defence tech companies; on the other, the acquisition of these very same companies by foreign entities. Added to this is the technological dependence, as highlighted by Cesare Battaglia by PwC Italy: “The return of war, the intensification of technological competition and the redefinition of transatlantic relations have brought security back to the forefront of the European agenda. We need to build greater technological independence and greater development capacity. If we look at the figures, the growth in European defence spending sets out the priorities: a 50 per cent increase since 2021, 68 per cent of which is earmarked for procurement”. And further: “Europe is investing far more in defence, but this growth is primarily aimed at catching up with the present, rather than yet at building the technological competitive advantage of the future. “Procurement fills an existing gap; research determines what capabilities we will be able to acquire, produce and control on the battlefield of tomorrow”.
So why is dual-use necessary? Mariangela Dejana of D-Orbit explains: “Today, procurement times and institutional response times – in the face of technology that is changing much faster than in the past – mean we cannot afford to develop dedicated capabilities. We no longer have the time to develop assets through the space programmes we were familiar with when the sector was as it was just a few years ago: it is important to be able to use what already exists and is available. Dual-use technology today can give companies like ours the opportunity to reduce timescales and costs for institutional demand and, to some extent, for defence.” As for the ‘golden power’, Dejana believes “it is an effective tool, but it always comes too late. Today, on the European side, we lack effective tools to compete in the defence sector and to support our industrial base in highly critical technologies such as those in the space sector”.
Although ‘dual use’ and ‘golden power’ are presented as the two solutions to the Italian problem, in reality they pull in opposite directions: ‘dual use’ is a gateway that makes it possible to finance what was previously off-limits and bridges the gap between the pace of technology and procurement timelines; yet, as Dealroom’s figures show, almost half of the capital coming through that gateway is American. ‘Golden power’, which is supposed to block that door, seems instead to be more of a bolt: whilst it can certainly halt an acquisition, unfortunately it only comes into play after the fact. The game today, therefore, is no longer about whether to open or close the door, but about who holds the keys.
Can a country that does not want rearmament accept ‘dual use’?
According to the latest survey by the ECFR (European Council on Foreign Relations), carried out in May 2026 across 15 European countries, 58 per cent of Italians said they were opposed to a further increase in defence spending, compared with 28 per cent in favour: Italy is the only country in the sample where the ‘no’ vote prevails. According to the European Parliament’s Eurobarometer (2025), when asked whether it was urgent to raise the EU’s defence spending to 5 per cent of GDP, 62 per cent of Italians replied that there were other, more urgent priorities.
To understand how the concept of dual-use might be accepted by a public that has recently been taking to the streets to protest against rearmament and war, we picked up where our previous in-depth report left off and put the question to two key figures at the summit, both of whom have a stake in the matter: Pierluigi Paracchi, president of the Praexidia Foundation, and Andrea Bonabello, general partner at NVM Ventures and CEO of Ulixes Capital Partners, the company that organised the event.
Interview with Pierluigi Paracchi
During the panel discussion on dual-use technologies and space, Mariangela Dejana emphasised that, from a European perspective, we currently lack effective tools to compete in the defence sector when it comes to critical technologies such as those used in space. In Italy, we have the ‘golden power’; and Europe offers dual-use provisions on the financial front: from 2024, the EIB will no longer require dual-use projects to derive more than half of their turnover from civilian use. Across the Atlantic, meanwhile, it is start-up founders who are shaping the Pentagon’s strategy: take the Meridian programme, for instance, which has been entrusted precisely to the US tech oligarchy. What, then, is needed today in Italy and across Europe?
The crux of the matter is that in America there is the executive order: like it or not, the president takes office, signs documents and gets things done. Here, we have an infinitely vast bureaucratic system; we have created this bureaucratic monster that is Europe, where it always seems as though there is money. The EIB is ready, there’s the SAFE fund, but all these instruments have implementation timescales that do not match market needs. Anthropic was founded five years ago, not fifty: it went public, raising 100 billion at a valuation of 1.5 trillion, and already had an agreement with the US government. A start-up founded five years ago manages to strike deals with the Department of Defence, the government and the CIA: this is a pace that is unimaginable for us today, a tremendous limitation we face in Italy and in Europe in general. Dual-use licensing could eliminate some of this bureaucracy for a start-up that wants to scale up whilst collaborating with the public sector.
Years ago, as we reported, citing the Wall Street Journal, climatech start-ups responded to the withdrawal of major funds from ESG investments by pivoting towards AI and defence; at the same time, the concept of dual-use was introduced in Europe by the EIB. How can we accept that a civilian technology might be used simultaneously for military purposes, and invest in it? Is this a dualism that is driven solely by market logic?
That is precisely the underlying vision of that strategic space. We have no qualms about mentioning biotechnology, defence and aerospace: this is the strategic space in which the world’s leading nations operate. Either we come to terms with this, or we remain naïve and think that the researcher with the pipette is the ‘good guy’ and the one developing the drone interception system is the ‘bad guy’. It’s absurd: the former might be doing good because we hope he’ll find a cure for cancer, the latter because he prevents a drone from reaching the Ara Pacis and destroying it. […] When we look at Ukraine or Iran, we always feel as though we’re in a film, as though we’re mere spectators. Yet you are an actor, and you must decide which side to take. This is a process of maturation that this country has not yet undergone. However, today we’re holding a conference and 300 people are attending: this is the vanguard, and that is a value worth taking into account.
Interview with Andrea Bonabello
We are at the event promoted by NATAM and organised by Ulixes, the fund’s exclusive adviser. Ulixes, however, has a background in consumer and software investments, in agri-food tech and wellness companies. How did it come to focus on dual-use applications?
Ulixes was launched in 2019, at a time when the early-stage market was virtually devoid of professional investors in start-ups. There were very few club deals, micro-funding platforms and only a handful of funds, which tended to focus on later stages. We began investing with a generalist approach, but out of 30 investments, at least a dozen are deep tech, and some of these already fall within the broader definition of dual-use.
Is there a written definition of ‘dual-use’ in the fund’s regulations? For example, is there a limit on the proportion of a start-up’s revenue that can come from the military, or an exclusion for weapons systems? If one of your portfolio companies were to secure an army as its first client, would it still be considered dual-use?
The fund’s offering memorandum does not contain a definition of ‘dual-use’, but it does include a list of sectors. Weapons systems are excluded by definition, given that we also have European public funds: we comply with European regulations on the allocation of funds, so we do not invest in armaments, as defined by European legislation.
In addition to the European regulation, which sets out a list of sectors, there is, however, the financial plan: from 2024, the EIB has removed the threshold requiring dual-use projects to derive more than half of their turnover from civilian use. Do you have a limit of this kind?
This restriction does not apply to us either: the companies are ‘native’. For us, ‘dual-use’ refers to a company with technology that, without any specific distinctions or customisations, can be applied in both the civilian and defence and security sectors. Not all the companies we invest in operate in both sectors: potentially, a company could be 100 per cent defence-focused, but this is unlikely, because the civilian market moves faster than the defence market. It is more likely to be 100 per cent civilian, with defence as a potential market. The sectors we have identified are those within Lazio’s industrial supply chain: aerospace, cyber security, biotech, automation and robotics, and artificial intelligence applied to defence. There are still exclusions, namely armaments, which are not covered by the fund. In reality, the companies we are looking at almost always have the civilian sector as their primary outlet, followed by dual-use applications for defence and security; it is rare for the companies we identify to have originated as purely military applications.
Talking about dual-use technology these days is a sensitive issue, especially for our readers: whilst spending on healthcare and education is being cut, the streets are filling with protesters against rearmament. Why shouldn’t this concept alarm the reader?
I, on the other hand, would be afraid of failing to invest in technologies that form the backbone of our autonomy and resilience, and which guarantee our security: I would almost be concerned about the opposite. Obviously, I am in favour of investment in education and healthcare: with an unlimited budget, these should be the sectors on which to concentrate the majority of resources. But there is no conflict here. The defence industry has always produced innovations that have subsequently found their way into the civilian sector: technologies we use every day, such as GPS, the internet and AI, originate from the defence sector. And biotechnology falls under the definition of ‘dual-use’, so in the broadest sense it is linked to healthcare. Spending on dual-use technologies does not necessarily mean diverting resources away from innovation that brings value to education, healthcare or other sectors of the civilian economy.
Conclusions
As regards European public investment in defence and security, the European Defence Fund (EDF) has a budget of around 7.3 billion for the period 2021–2027, of which around 4 has already been allocated to 224 projects; the EIB, which until a few years ago was barred from the sector, disbursed over 4 billion euros in 2025 alone – four times the amount of the previous year. SAFE, however, deserves separate consideration: 150 billion in subsidised loans for the purchase of armaments, entirely allocated to 19 countries, which, however, finance military expenditure rather than innovation.
In the private sector, according to Dealroom, venture capital investment in European defence start-ups rose from around half a billion dollars in 2021 to 7.4 billion in the first nine months of 2026, totalling around 12.6 billion euros over the period; the projection for the end of the year exceeds 10 billion, around twenty times the 2021 figure. Private equity has accelerated even further: according to PitchBook, in the first quarter of 2026 alone, it invested 5.9 billion euros in the European aerospace and defence sectors.
The public sector invests around one billion a year in defence innovation, whilst the private sector has invested over seven billion in nine months. The private sector is set to overtake the public sector between 2024 and 2025, precisely during the same months in which the EIB is abolishing the rule that required dual-use projects to derive more than half of their turnover from civilian use. Dual-use projects have therefore acted as a free pass: they have made it possible to finance what was previously outside the scope. The public sector has not disappeared; it has shifted its focus to expenditure (SAFE) and credit leverage (EIB). But the risk associated with innovation is now borne by venture capital, almost half of which is American. (Pictured: the Ara Pacis in Rome – image: Depositphotos)
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